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RFS hearing draws hundreds

Hundreds converged in Kansas City, Kan., on Thursday, June 25, for a national public hearing in front of Environmental Protection Agency administrators to receive comments on the agency’s proposed rule which sets the volume levels for the Renewable Fuels Standard for 2014, 2015 and 2016 and biodiesel volumes for 2017.

Notable attendees at the hearing included Iowa Gov. Terry Branstad, Missouri Gov. Jay Nixon and Iowa Secretary of Agriculture Bill Northey, along with numerous representatives of renewables groups and the National Corn Growers Assn.

Just a block away from the hearing, Midwestern farmers and key leaders also held a Rally for Rural America. (View video of rally here.)

EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. In November 2013, EPA proposed levels that have come under considerable attack from both sides of the issue.

In hopes of setting the RFS back on path, at the end of May EPA proposed what some have considered a compromise, although biofuel supporters have called for increased levels while those opposed to the RFS continue to call for less corn-derived ethanol use.

The EPA’s proposal would cut nearly 4 billion gallons of ethanol from the RFS through 2016, representing nearly a billion and a half bushels in lost corn demand.

“We simply cannot afford – and will not tolerate – efforts to cut the demand for corn, and that’s exactly what your proposal will do,” NCGA president Chip Bowling of Maryland told the EPA. “We cannot let this stand. We’ve done our part, and our allies in the ethanol industry have done their part. It’s time the EPA sided with those of us supporting a domestic, renewable fuel that’s better for the environment.”

Branstad testified that EPA’s indecision the last two years has led to market uncertainty that hurt farmers as well as froze investment in next generation technology. In August 2013 ahead of the proposed lower RFS levels the price of corn was $6.00/bu., now it has fallen to $3.45 a bushel. Iowa farmland prices dropped 15% last year and the U.S. Department of Agriculture estimates that farm income will decline 32% this year.

Tom Buis, chief executive officer of Growth Energy, said over the past eight years the oil industry has used considerable power to delay, litigate and undercut the RFS. “Now, by refusing to take any steps to allow higher biofuel blends into the consumer marketplace, the oil industry is claiming the statutory volumes of the RFS cannot be met because of the so-called ‘blend wall.’ The EPA’s proposal to waive the statutory renewable fuel volumes mistakenly accepts this logic.” He said this ignores the potential for E15, E85 and biodiesel, increased gasoline demand as well as the large surplus of RINs which could be used.

Brenda Heffelfinger, business manager, grain processing, DuPont Industrial Biosciences, testified that the United States has quickly risen to lead the world in biofuels technology and execution by that leadership is now hanging in the balance, dependent upon the actions of the EPA to correctly administer the policy.

“DuPont plans to license the next wave of biofuels technology, cellulosic, here in the United States and around the world. However, the most promising announcements, negotiations and conversations are all happening outside the United States. As long as the EPA continues to undermine existing domestic biofuels capacity, this will continue, creating a scenario where the benefits of U.S. innovation and technological advances are realized overseas,” DuPont said.

American Soybean Assn. Kansas director Bob Henry pointed out that ASA is “glad” that EPA’s proposed rule increases volumes for biodiesel in the RFS to 1.9 billion gallons in 2017, but noted that the agency has an opportunity to support more aggressive biodiesel levels in the future.

“We see no reason why EPA should not, at a minimum, support biomass-based diesel volumes of at least 2 billion gallons for 2016 and 2.3 billion gallons for 2017,” he said, highlighting that additional soybean oil will be displaced from domestic food markets as a result of the recent FDA determination requiring the elimination of all partially hydrogenated oil.

Over the 262 individuals who testified at the hearing, approximately 230 were pro-biofuels. Individuals from the American Motorcyclist Assn. shared that their members prefer the E0 option. Other retailers discussed some of the economic challenges of widespread market acceptance of E85.

Although not testifying at the event, the National Chicken Council said EPA has taken the proper approach by lowering the required volume obligations from the statutory levels to reflect the practical limits imposed by the blend wall. “NCC strongly believes this adjustment is necessary to avoid an unreasonable and unsustainable biofuels mandate,” NCC said in a statement. “NCC supports further reductions in the target levels for 2015 and 2016 to account for the distorting effects the RFS has on the market for corn, substitute feed products, chicken prices, and food prices in general.”